Auto Insurance: 10 Mistakes to Avoid When Buying

Introduction

10 mistakes that people make when they’re buying auto insurance. I’m going to give you 10 tips to help you keep from making the mistakes that most other people make when they’re buying auto insurance.

Understanding the Importance of Informed Decisions

Hey, look, auto insurance is expensive. It’s getting more expensive right now. We’re seeing inflation being so much more and so many more natural disasters happening. We’re also seeing auto insurance rates just go higher and higher. So you need to make informed decisions.

With this information I will help you make informed decisions about your auto insurance so you don’t pay too much for the coverage that you need. Also, keep you from just making some of those different mistakes and just not knowing what in the world you’re buying.

Look, if you’re going to spend a lot of money on your auto insurance, shouldn’t you understand what you’re buying? Don’t you deserve to know what in the world it is you’re buying? Well, all right, well, I’m going to give you 10 tips today to help you understand the best decisions that you can make about buying your auto insurance. So let’s get into that and let’s start off with number one.

10 Tips for Buying Auto Insurance

1. Knowing the Insurance Coverage You Need

Number one is knowing the insurance. Not knowing what coverage you need. Too many times consumers will go in and they have no idea what they’re looking for. They’ll go in and just ask, “Why do I need full coverage?” Well, they don’t even know what that word really means.

Really, there’s no real term that I can just say, “Okay, full coverage here, I check this box and that gives you this.” There’s not really anything called full coverage, honestly. Now we have some sort of an estimate or an assumption we can make that will say, “Yeah, this is what that means.” But look, you know whenever you assume things, it just doesn’t work out the best for you. It’s not the best thing you can do for yourself. So don’t assume and don’t just go in not knowing what it is that you actually need.

2. Comparing Insurance Companies and Agents

Number two is not comparing insurance companies or also really insurance agents. I would almost say that not comparing insurance agents is probably even more important than not comparing insurance companies.

Here’s the deal: a lot of insurance companies, unfortunately, have bad reviews because the thing is, people don’t just get excited about reviewing insurance companies. They get excited and motivated whenever something goes wrong. So that’s whenever people review insurance companies, and so it’s going to be a lot of negative reviews, unfortunately, because of that. They’re not warranted. Most insurance companies are very good.

Now, what is important is to know your insurance agent. As an independent insurance agent, we represent a lot of different insurance companies. If it’s a good agent, they’re going to be picky about who they work with. We are. You can take a look at us and you can do a Google on us and see that we’ve got a lot of Google reviews that are all five-star reviews because we care about our clients. Also, we’re very picky about the insurance companies that we work with.

3. Avoid Lying on Your Car Insurance Application

Number three is lying on your car insurance application. Hey, don’t lie on your application. Here’s the one thing: if you think you’re going to be able to hide violations or accidents, whatever else that you’ve had or claims, it’s gonna show up. All those different things are going to show up because we run all kinds of different reports that show these different things that you’ve got on your history.

Now, another thing that potentially may not show up is undisclosed drivers. Now, if you’ve got some sort of drivers in your house such as teenage drivers or just maybe a family member like that that lives with you, you may need to list them. The reason is, there’s some insurance companies out there that will exclude coverage for that person if they live inside of your house.

So if they’re driving your car with your permission and they’re not listed, they may be excluded. If they have an accident, there may be no coverage. It doesn’t matter if it’s their fault or not, there may be absolutely no insurance coverage at all. We don’t represent any insurance companies like that, but you need to be aware that there’s a lot of insurance companies out there that are both direct and also in the independent channel that do so. Don’t lie on your application.

Another thing is that you know if you do lie on the application and you’re found out at claim time, that’s called fraud and they can deny your claim no matter what. So don’t do that.

4. Updating Your Insurance Policy

Number four is forgetting to update your insurance policy. Hey, look, life changes, right? You know all kinds of different things change like you pay off your car, you have a teenage driver that comes on, you have a teenage driver that moves out of the house, you move to another location maybe inside the same city but still, all those things impact your rates on your policy. Maybe you don’t need some certain coverages anymore, maybe you do need some other coverage now. So make sure that you talk with your agent annually and let them know, “Hey, these are the seven things that are going on in my life. These are some things that are changed that may affect my insurance.”

5. Choosing the Right Deductible Amount

Number five is choosing the wrong deductible amount. Look, the higher the deductible, the lower your premium. The lower your deductible, the higher your premium. You know, ask yourself, does it make sense for me to have a $500 deductible? You know, whenever you can afford to have a higher deductible because you’re probably not going to turn in those smaller claims anyway because they’re just going to adversely affect your insurance. So you know, ask your agent about increasing those deductibles and save some money.

6. Researching Car Insurance Online

Number six is not researching car insurance online. You know that goes back to really number one to some degree, right? It’s you’re going in and making sure you understand the coverages that you need. Look, if you work with us, we’re going to explain to you about those insurance coverages. But every agency is not going to do that. You know, we’ve talked before about our different promises that we’ve got. One of those promises is that we want to make sure that you understand what you’re buying so you feel good about it, right? You need to understand. It’s a lot of money, you should understand. Do research on your own and then talk to your agent. If your agent is not explaining these coverages, you need to find another agent because they are not the best agent for you.

7. Avoid Buying the Minimum Insurance Coverage

Number seven is just buying the minimum insurance coverage. Now, a lot of states have a minimum liability limit coverage that you can buy and you can buy this perfectly legal, but it is not the best thing for you. Here’s why: whenever you buy those really low limits, they’re not going to adequately protect your assets. Many times these asset amounts are not even enough to buy it to pay for a car if you get an accident. You know that you would get an accident with to get it fixed. What happens is if you have an accident and you run out of those liability limits, the insurance company is out of the game and it’s up to you.

You got to get out your checkbook or your credit card and start passing out their dollar bills because you’re still responsible even though you run out of insurance. So do not buy the minimum limits. If you’ve got an agent that is okay with you buying that and you’ve got a $300,000 house, you’ve got a couple of cars, you’ve got children that are in college or whatever, you need to fire that agent and find you another agent. Look, we try to make sure that all of our clients have higher limits than that to make sure that they have adequate limits for what their needs are. If your agent is not willing to talk to you about it or just says, “You know that’s all you need,” you need to fire that agent, find you another insurance agent.

8. Avoid Buying Excessive Coverage

Number eight is buying excessive coverage. Now, I know it sounds funny for an insurance agent to say, “Well, you can buy too much insurance.” Well, you can. There’s different coverages that you just flat out don’t need. Remember, I talked about the lower deductibles. You don’t need lower deductibles if you can afford to pay a thousand or twenty-five hundred dollars out of pocket. You need to do that because you don’t need to file those small claims anyway because you’re just going to pay for it over time. So that’s just not wise.

Well, there’s also other coverages that you just may not need to buy like if you buy a brand new car, the dealership is going to try to sell you a coverage called Gap. Well, you know you can buy that from your insurance agent for a lot less money. I mean like maybe a tenth of what the cost is at the dealership. You know other things that you can buy that you may not need long later on or that you maybe that’s not need at all is full glass. You know comprehensive coverage is going to cover your windshield, but maybe you’ve got a really small deductible. I mean, do you need full glass? I mean, how often do you really replace a windshield?

Do you need to pay that extra money for that?

You know, just keep that money in your pocket and then whenever you need it, then you pay it because you may not ever pay it. Look, I’ve had a vehicle for, I’ve been driving my own cars for over 30 years. I’ve only replaced the windshield once. You know, does that make sense for me to pay more money when I’ve only replaced the windshield once in all that time on one of the two cars that we have? It doesn’t make sense.

9. Asking Questions

Number nine is not asking questions. See, look at my fingers right there. Number nine is not asking questions. Hey, look, you deserve to know, you deserve to understand what you’re buying. You are the consumer, you’re paying the money, you deserve, you have a right to understand what you’re buying. Ask questions, don’t feel dumb, ask questions. If your agent will not take the time to explain coverages to you, fire them, get another one. There’s plenty of good agents out there. Remember, go back and I’ve talked about the researching of your insurance agent. Hey, Google your area or Google us and look up the reviews that they have and find an agent that’s got a lot of good reviews and then call them. So ask questions.

10. Looking for Car Insurance Discounts

Number ten is not looking for car insurance discounts. Looking for car insurance discounts. Look, there’s tons of discounts out there whether you’re in the military, educator, your education level, you know, married, student, all kinds of different things or bundling your insurance. There’s all kinds of different discounts out there. Hey, talk to your agent, tell them a little about yourself, tell them if you got students, you know, children away at school or you’re about to get married or you’re about to buy a house or you’re planning on living somewhere. If you’re active military, all those different things matter. Make sure that you, you know, you talk to your agent about those.

Like also, like on your home side, do you, you know, does anybody smoke in your house? Do you, you know, someone at home during the day? Do you have an alarm system? You know, make sure your agent knows these things so that they can give you the adequate discounts that you deserve. Look, even the best agent is going to forget some questions.

They’re going to try to do their best to find out. At least a good agent is going to try to find out, you know, different ways that they can help you save on your auto insurance.

Conclusion

I hope this top 10 has helped you to make more informed decisions about buying your auto insurance. If your insurance agent is not willing to talk to you about these different things, you need to fire them and find you another agent because you deserve, you have a right to know and to understand about these things. Also read this.